PayPal Product Managers Try To Win A Popularity Contest

by drjim on January 11, 2010

PayPay Is No Longer The Only Game In Town

PayPay Is No Longer The Only Game In Town

You would think that if your product was the biggest one in it’s market, you’d be sitting pretty as a product manager, right? Sure, this might be an easy trap to fall into; however, if you start to take it easy once you are the king of the hill, then that’s when your competition shows up and knocks you off. Over at the big online payment processor PayPal, their product managers are currently doing quite well. However, they can see the handwriting on the wall and are taking some bold steps to remain #1…

What Me Worry?

If you want to have a successful product that everyone needs, then the world of online payment processing was the business to go into awhile back. Something like a zillion dollars gets exchanged online everyday and right now there’s pretty much one main player in this industry: eBay’s PayPal unit.

As product managers we all realize that when you become very successful, that is a signal for other companies to create products to compete with you. It’s taken awhile, but now the PayPal product managers are starting to see some competition. Serious competition. This when product managers need to be extra careful and not make marketing mistakes.

And In This Corner We Have…

Don’t get me wrong, the PayPal product managers have created a very good product and they’ve listened to their customers and they’ve made it very easy to use. However, this market is too big right now and growing too fast not to attract some highly qualified competition.

Amazon.com currently sells just about everything on the planet. Amazon.com already has a huge customer base and enormous computing power. They are looking to leverage this with a new transaction processing service that they are calling “Pay-Phrase” . The Amazon.com product managers are betting that if they make it even easier to shop with them, then more people will do so.

Google offers the most direct competition in their “Google Checkout” payment processing system. One of their greatest strengths going forward is that this service has been integrated into the Android mobile operating system.

Facebook may represent the greatest threat to the PayPal product manager’s long term success. Simply put, Facebook’s user base of over 300 million users gives it an unprecedented reach into the consumer market. This is exactly what any online payment processing company needs in order to succeed.

The Facebook product managers have created a virtual currency called Facebook Credits that can be used to buy both virtual and real goods. Right now only a few vendors are using these credits to allow users to buy things, but that may all change quickly. Facebook has opened up a gift shop that accepts Facebook credits and they are starting to sell both virtual goods as well as products from other companies. This sure sounds like what they talked about in that book The Innovator’s Dilemma

How PayPal Product Managers Are Fighting Back

As you might expect, the PayPal product managers are not taking this competitive challenge lying down. They believe that the key to their long-term success is to make their payment processing system an integral part of many different products so that it will always be there ready to be used by consumers.

In order to make this happen, they are preparing to rollout a new system that will make it easier for software developers to integrate the PayPal system into their own applications. This new software, called PayPal X.

The key goal of this new software is to eliminate the need for customers to have to sign into a separate PayPal web site in order to complete their purchase. Instead, they’ll be able to complete it without leaving the web site that they are on.

What All Of This Means For You

All product managers dream of being responsible for a wildly successful product. The PayPal product managers have clearly succeeded in achieving this dream. What is interesting for the rest of us to observe is what they do now: do they rest on their laurels or do they kept moving forward?

Clearly PayPal’s competition has shown up in force in the guise of both Amazon.com and Facebook. Both of these companies have the luxury of having been able to watch what PayPal has done and learning from their mistakes. The products that the competition rolls out will pose a serious threat to PayPal.

Before you start feeling too sorry for those poor successful PayPal product managers, realize that they seem to have realized that they are facing a threat and are taking steps to stay in the lead.

For the rest of us, I believe that the message from this competition needs to be that no matter how successful our product becomes, we can never take it easy. We will always have competition, it’s what we do to meet it is what determines how successful we will be as product managers.

What do you think that Google has to do in order to be a true competitor to PayPal?

Click here to get automatic updates when
The Accidental Product Manager Blog is updated.

P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

What’s a product manger to do when your #1 competitor is your own product? This is exactly the situation that Microsoft’s Office product managers now find themselves in…

Be Sociable, Share!

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: